Social-Focused Digital Signage Start-Up Enplug Gets $2.5 Million Seed Backing

enplug

LA-based startup digital signage start-up Enplug has done a $2.5 million seed round from what looks to be a broad range of tech investors, the money intended to broaden the company’s footprint.

The funding, reports TechCrunch,  comes from a number of investors, including Oaktree Capital Co-Founder Larry Keele, Juniper Networks Founding Member Rasoul Oskouy, Idealab Founder Bill Gross, Former AT&T President and CTO Hossein Eslambolchi, Interscope Executive Vice President David Cohen, Lightspeed Venture Partners Managing Director Justin Caldbeck, Atom Factory CEO Troy Carter, Activision Co-Founder Howard Marks, DominateFund, zPark Venture, and Amidi Group.

The two-year-old company has an interesting go to market approach that is built around social media content, and a set-up that gives small business operators the ability to opt in or out of advertising, which appears to be mostly in the form of sponsored posts. It’s a lot like the ad-based model for mobile apps, in that the apps tend to be free or cheaper if you will put up with advertising.

In this case, there’s no free, but you’ll pay less ($149/month) for an Enplug screen subscription in a venue that carries third-party posts. There’s an enterprise option where third-party sponsored content is just optional.

 

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The programming model is built around aggregating and filtering social media interactions for businesses, based on user handles and hashtags. The playback engine works off panels that have (presumably) a browser.

Using the social media firehose is a dodgy proposition, but Enplug says it has profanity filtering algorithms that can sense naughty words and negative sentiment. Good, but I’d still be scared <profanity>less about people who’d make it their mission in the coffee shop to work around that with an an acronym or image. But Enplug also has a moderation app the shop owner can use to curate and approve what hits a screen.

The company says it has 350 screens up in 40 cities, but most of those cities would be like the City of Pasadena, and so on.  It has a good footprint in Greater LA and, for now, a minimal presence in a handful of other major markets like Chicago.

An interesting take on this stuff. I like the presentation model and believe there can be a lot of value of getting social media into small business environments, if it is human-moderated. The challenge is that the small business owner has to commit to it and stick with it, and it probably best suits those SMB people who are already very active on things like Twitter.

I’m way less enthused about the ad model. The list of companies that have tried to make a go of Digital OOH networks with a service that’s paid for with advertising  is long and mostly sad. Particularly when it’s a hyperlocal ad play.

I’m guessing the seed money came a little easier because there’s a subscription model and recurring revenue, and the company is not solely dependent on those elusive ad revenues.

 

 

Dave Haynes

Dave Haynes

Editor/Founder at Sixteen:Nine
Dave Haynes is the founder and editor of Sixteen:Nine, an online publication that has followed the digital signage industry for more than a decade. Dave does strategic advisory consulting work for many end-users and vendors, and also writes for many of them. He's based near Toronto.
Dave Haynes

@sixteennine

11+ year-old blog (and now podcast) about digital signage and related tech, written by industry consultant, analyst and bullshit filter Dave Haynes.
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4 Comments

  • Steve Gurley says:

    I’m very bullish on signage with a strong social media play. You’re right about the moderation though, this will be it’s achilles heel. For now, it has to be human moderated. This is less of a problem for larger brands, but as you point out… rather dodgy for small vendors.

  • Dave says:

    The fact I read every one of your blogs instantly defines my life or lack of. I found it interesting that you wrote about Enplug. I was going to forward the link to you the other day. I ran across it because I’m very interested in the hyper regional ad supported digital signage concept. I recognize Enplug’s concept is certainly not hyper local but this post was the closest to the topic you’ve come to so I took the opportunity. My definition of this environment is maybe 30 displays located in relatively small geographic area with the goal of developing a neighborhood feeling with local ads and community information. I’ve been researching it for longer than I care to admit. My problem is that the industry runs screaming when you mention the topic, but none of the pundits can muster any reasonable number of known failures to support their aversion. It appears that their distaste is influenced by the larger ad supported networks that have failed. I question if the DS industry has any idea as to how many hyper local ad supported networks exist.
    I’ve spoken to individuals who have put up 10 to 50 displays. They’re not getting rich; many are using it as a second income until revenue is significant enough to quit their regular job. They are however, surviving and some are actually making a good living. Proponents of the merits of digital signage promote the hanging of a display; include some content that is basically an ad and you’ll soon see an ROI and an increase in sale. If this premise is true then ad supported networks should also be viable.
    . Enplug basically put up 350 in mostly Asian run establishments. Maybe this is due to some influence their CEO has in that community. I bet that they had to do some real dealing to convince venues to buy into the program. While the social media aspect is interesting, I don’t think $149 to $199 for each venue is going to pay the bills. If not it means they have to chase ad sales. It’s interesting that they were able to attract $2.5 mil. Unless they have something up their sleeve with regards to social, some investors may be disappointed if the industries negative observation of ad supported networks is accurate.
    I’d be interested in any information or hearing more from you about DS hyper local ad supported networks. I’d be more than happy to trade insight about the static world. The DS world might learn something from those who were in the thick of the static transition from doing things by hand to the multi-billion dollar large format digital printing world.

    • Guy Tonti says:

      A while back our company posted the following http://tinyurl.com/moy9ygp in 16-9 about our hyperlocal DS network in Phoenix.

      In this post we did not mention our customer sign acquisition model, which is similar to Engulf. We determine does a location want/can benefit from a sign…if yes, would they rather it be 100% their content or are they willing to allow advertising at a reduced price.

      We only do a few of the non-advertising customers, mostly because the advertising-enhanced model is so attractive.

      The advertising model of signs is not a pure profit maker (the $149-$199 mentioned above)…but gets it close enough that with the addition of a significant number of pure advertisers it works out. These pure advertisers come/go on the network because the cost to produce/change is minimal (compared to a sign customer).

      The key is the sign location (inventory) being of value to the pure advertisers (the signs need lots of viewers, spending a lot of time, who have a lot of money; in a relative geography).

      The first 3 are easy to determine (we are NOT in convenience stores :-), the last is where it will be interesting to see if Engulf can expand from its base of Asian establishments. In Phoenix, we view the Spanish population as another whole city, the crossing of viewers and advertisers is virtually non-existent and it would require a complete new set of content.

      I personally welcome this entry from an investment perspective; with the hope it does not turn into a graveyard of DS as that does no good for the industry.

    • Dave Haynes says:

      Hi Guy

      It’s fascinating to think how hispanic Phoenix is its own advertising animal, with virtually no ad cross-over from the Anglo market. I expect that’s not unique.

      I definitely wouldn’t be in c-stores or similar environments, but also wonder about a lot of these cafes and coffee shops that have dwell time and theoretically attractive demographics, but pretty damn skimpy day to day foot traffic.

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